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Portions of this Exhibit 10.4 have been redacted and are the subject of
a confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.
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LICENSE AGREEMENT
This Agreement is made this 26th day of May 1998 (the "Effective Date"), by and
between the OSI Pharmaceuticals, Inc. ("OSI"), a Delaware corporation with
principal offices at 106 Charles Lindbergh Blvd., Uniondale, New York 11553-3649
and Aurora Biosciences Corporation ("ABSC"), a Delaware corporation with
principal offices at 11010 Torreyana Road, San Diego, California 92121.
RECITALS
WHEREAS, OSI is the owner of the Assay Patents defined herein, and the Method of
Modulation Patents defined herein; and is willing to grant a license under such
patents to ABSC; and
WHEREAS, ABSC wishes to obtain a license under the Assay Patents and an option
to obtain a license under the Method of Modulation Patents, according to the
terms contained herein;
Now, therefore, in consideration of the covenants and premises contained herein,
the parties agree as follows:
1. DEFINITIONS
1.1. "Act" is defined in Section 3.1.1.
1.2. "Affiliate" means any corporation or other business entity
controlled by or under common control with, a party to this
Agreement or a Third Party. Control, as used in the context of
a business entity, means the ownership, directly or
indirectly, of fifty percent (50%), or greater, or the maximum
interest permitted by local law of the voting securities of
the corporation or other entity or a fifty percent (50%) or
greater interest in the income of such corporation or other
entity or the ability otherwise to manage the affairs of such
corporation or other entity.
1.3. "Assay Patents" means the U.S. patents and patent applications
listed on Exhibit A hereto, any patent applications filed
prior or subsequent to the Effective Date that claim the
benefit of the filing date of any patent application listed in
Exhibit A and any reissues, extensions, substitutions,
confirmations, re-registrations, re-examinations,
continuations, divisionals or continuations-in-part of the
foregoing patents and patent applications, as well as all
foreign counterparts thereof, to the extent that such patents
and patent applications are not Method of Modulation Patents.
1.4. "Aurora Assay" means ** .
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1.5. "Aurora Technology" means all Technology owned or controlled
by ABSC which is not an Aurora Assay.
1.6. "Confidential Information" means all information received by
either party from the other party pursuant to this Agreement,
which is deemed confidential by the disclosing party and is
designated confidential at the time the information is
disclosed, subject to the exceptions set forth in Section 8.1.
1.7. "Cosmeceuticals" means compounds, or assays for discovering
compounds, useful for (a) stimulation or control of hair
growth, (b) prevention or reversal of wrinkling of the skin,
or (c) alteration of skin or hair pigmentation, in each case
in human subjects.
1.8. "FDA" means the United States Food and Drug Administration, or
any successor agency having regulatory jurisdiction over the
manufacture, distribution and sale of drugs in the United
States or the equivalent agency in any other country.
1.9. "IND" means an Investigational New Drug application in the
United States or the equivalent application in any other
country.
1.10. "Intellectual Property" means any information and data which
is not generally known to the public, any new and useful
process, machine, manufacture, or composition of matter, or
improvement thereto, whether or not patentable, designs,
concepts, algorithms, formulae, software, techniques,
practices, processes, methods, knowledge, skill, experience,
expertise and technical information; copyrights; trade
secrets; or patent rights (including pending and issued patent
rights anywhere in the world).
1.11. "Materials" means any biological or chemical entity for
screening or assays, including reagents, cells, promoters,
enhancers, vectors, plasmids, proteins and fragments thereof,
peptides, antigens, antibodies, antagonists, agonists,
inhibitors, and chemicals.
1.12. "Method of Modulation Patents" means the U.S. patents and
patent applications listed on Exhibit A hereto, any patent
applications filed prior or subsequent to the Effective Date
that claim the benefit of the filing date of any patent
application listed in Exhibit A, and any reissues, extensions,
substitutions, confirmations, re-registrations,
re-examinations, continuations, divisionals or
continuations-in-part of the foregoing patents and patent
applications, as well as all foreign counterparts thereof, to
the extent such patents and patent applications claim an in
vivo method of modulation of a gene of interest or a
composition useful in such a method.
1.13. "NDA" means a New Drug Application or Product License
Application, as appropriate in the United States or the
equivalent application in any other country.
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1.14. "Net Sales" means the gross amounts actually received by ABSC
and its Affiliate and Sublicensees and their Affiliates from
arms' length sales of Product(s) to Third Parties whether
invoiced or not, less:
(i) Trade, quantity and cash discounts allowed;
(ii) Refunds, rebates, chargebacks, retroactive price
adjustments, and any other allowances which
effectively reduce the net selling price and are
appropriately deducted from sales under generally
accepted accounting principles;
(iii) Product returns and allowances;
(iv) Any tax imposed on the Product that is appropriately
deducted from sales under generally accepted
accounting principles;
(v) That portion of the amount received associated with
mechanical drug delivery devices; and
(vi) Allowance for distribution expenses.
Such amounts shall be determined from the books and records of
ABSC and its Affiliates and Sublicensees and their Affiliates,
as appropriate, maintained in accordance with generally
accepted accounting principles ("GAAP"), consistently applied.
In the event a Product is sold in combination with another
product(s), the Net Sales from the combination product, for
the purposes of determining royalty payments, shall be
determined by multiplying the Net Sales of the combination
product by the fraction, A/(A+B) where A is the average sale
price of the Product when sold separately and B is the average
sale price of the other product(s) when sold separately in
finished form. In the event that such average sale price
cannot be determined for either the Product or other
product(s) in such combination product, Net Sales for purposes
of determining royalty payments shall be calculated by
multiplying the Net Sales of the combination product by the
fraction C/(C+D) where C is the cost of manufacturing the
Product and D is the cost of manufacturing the other
product(s), determined in accordance with GAAP, consistently
applied.
1.15. "Product" means any human pharmaceutical product sold by ABSC
and/or an Affiliate of ABSC to a Third Party, the manufacture,
use, importation or sale of which in a specific country would
in the absence of this Agreement infringe an issued or granted
claim in a Method of Modulation Patent in such country and
which was discovered or developed by an activity which in the
absence of a license would infringe an issued or granted claim
in an Assay Patent.
1.16. "Shares" is defined in Section 3.1.1.
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1.17. "Sublicensee" means a Third Party and its Affiliates (if any)
that obtain a sublicense from ABSC under the Assay Patents or
the Method of Modulation Patents, or both.
1.18. "Target" means a specific gene.
1.19. "Technology" means Materials, Intellectual Property, or both.
1.20. "Term" has the meaning set forth in Section 9.1.1.
1.21. "Third Party" means any entity other than (i) ABSC and any of
its Affiliates and (ii) OSI and any of its Affiliates.
2. LICENSES
2.1. Licenses Under the Assay Patents.
2.1.1. OSI hereby grants to ABSC and its Affiliates**
2.1.2. OSI hereby grants to ABSC and its Affiliates**
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for confidential treatment.
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2.1.3. Within 30 days after the end of each calendar quarter
so long as this Agreement is in effect, ABSC shall
provide to OSI for such calendar quarter a written
quarterly report which indicates the following: (i)**
(ii) the date of **; and (iii) **.
2.1.4. OSI agrees **.
2.2. Right to Grant Sublicenses Under the Assay Patents.
2.2.1. OSI hereby grants to ABSC **.
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2.2.2. Sublicenses under Section 2.2.1 may be granted by
ABSC**
2.2.3. Commencing on the Effective Date, sublicenses under
Section 2.2.1. may be granted by ABSC**
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2.2.4. Within 30 days after the Effective Date ABSC**
2.2.5. ABSC shall within 30 days after entering into any
sublicense provide to OSI a copy thereof; provided,
however**
2.3. Option to Obtain A License Under the Methods of Modulation
Patents.
2.3.1. Subject to Section 5, OSI hereby grants to ABSC and
its Affiliates**
2.3.2. ABSC may**
2.3.3. If ABSC**
2.3.4. To the extent that OSI has** Exhibit C within 12
months of the Effective Date Exhibit C will be
limited to the lesser
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number** so listed; provided, however, that
if ABSC grants a sub-license**
2.3.5. With respect to any Target listed on Exhibit C which
OSI licenses to a Third Party on at least a
coexclusive basis OSI will notify ABSC within 30 days
of granting such license that such Target is no
longer available for licensing to ABSC or any other
Third Party.
2.3.6. If prior to OSI's granting at least a coexclusive
license to a Third Party under the Method of
Modulation Patents with respect to any Target listed
on Exhibit C, ABSC notifies OSI that ABSC wishes to
obtain a license with respect to such Target, OSI
agrees to negotiate with ABSC using good faith
efforts the terms of a nonexclusive license with
respect to such Target.
2.4. Right To Grant Sublicenses Under The Method of Modulation
Patents.
2.4.1. Subject to Section 5, OSI hereby grants ABSC**
2.4.2. Sublicenses under Section 2.4.1. may be granted by
ABSC**
2.4.3. ABSC shall within 30 days after entering into any
sublicense under the Method of Modulation Patents
provide to OSI a copy thereof.
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treatment.
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2.5. Right To Require OSI To Grant Direct Licenses Under Method of
Modulation Patents.
2.5.1. Subject to Section 5, OSI hereby agrees**
2.5.2. OSI will grant direct licenses pursuant to Section
2.5.1. to any Third Party to which ABSC has granted a
sublicense under the Assay Patents pursuant to
Section 2.2.1. for (i) the specific Target which was
the subject of a sublicense under the Assay Patents
limited to a specific Target or (ii) any specific
Target if such sublicense under the Assay Patents was
unlimited as to the number of Targets; provided such
Third Party accepts and signs such direct license
prior to the date on which such Third Party commences
good laboratory practice preclinical development of a
compound which affects such specific Target and which
has resulted from such Third Party's use of Aurora
Technology or an Aurora Assay.
2.5.3. In addition to those Third Parties to which OSI will
grant direct licenses as provided in Section 2.5.2.,
OSI will grant direct licenses for a specific target
pursuant to Section 2.5.1. to any Third Party for
whose benefit ABSC or an Affiliate of ABSC uses, but
to whom ABSC and Affiliates of ABSC do not transfer,
an Aurora Assay for such specific Target; provided
such Third Party accepts and signs such direct
license prior to the date on which such Third Party
commences good laboratory practice preclinical
development of a compound which affects such specific
Target and which has resulted from use of Aurora
Technology or an Aurora Assay by ABSC or an Affiliate
of ABSC.
2.5.4. The financial terms of any direct license granted to
such Third Party pursuant to Section 2.5.1. shall be
the same and the nonfinancial terms thereof shall be
substantially the same as those of a sublicense
authorized pursuant to Section 2.4.1.
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2.5.5. If a Third Party otherwise eligible to receive a
direct license from OSI pursuant to Section 2.5.1.
fails to accept and sign such a direct license with
respect to any Target within the time period provided
under Section 2.5.2. or 2.5.3., the obligation of OSI
to grant such a direct license shall expire with
respect to such Target.
2.5.6. If prior to OSI's granting at least a coexclusive
license to a Third Party under the Method of
Modulation Patents with respect to any Target listed
on Exhibit C, ABSC notifies OSI that ABSC wishes OSI
to grant a direct license with respect to such Target
to a Third Party to which ABSC has granted a
sublicense under the Assay Patents for such Target,
OSI agrees to negotiate with such Third Party using
good faith efforts the terms of a nonexclusive
license with respect to such Target.
2.6. Right To Require OSI To Grant Direct Licenses Under Assay
Patents
2.6.1. OSI hereby agrees **
2.6.2. OSI will grant such direct licenses to any Third
Party and its Affiliates to which ABSC may grant a
sublicense subject to the applicable time limit and
in accordance with the terms of ABSC's right to grant
sublicenses under the Assay Patent pursuant to
Section 2.2. Compensation to OSI will be the same as
set forth in Section 3.2; provided, however that ABSC
will not receive or owe any payment for direct
licenses granted by OSI.
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3. COMPENSATION
3.1. Compensation for the License Under the Assay Patents.
3.1.1. As full consideration for the license granted to ABSC
pursuant to Section 2.1.1. herein, ABSC shall on the
Effective Date a) pay to OSI a non-refundable payment
of $50,000 and b) irrevocably issue to OSI an
aggregate of seventy five thousand (75,000) shares of
ABSC's common stock (the "Shares"). Such Shares will
be tradeable one year from the Effective Date,
subject to applicable securities laws. All
certificates representing the Shares shall have
endorsed thereon legends in substantially the
following forms: (i) the securities represented by
this certificate have not been registered under the
Securities Act of 1933, as amended (the "Act") and
they may not be sold or offered for sale or otherwise
distributed unless the securities are registered
under the Act or an exemption therefrom is available
and (ii) any other legend required to be placed
thereon by applicable state, federal or foreign
securities laws. OSI acknowledges that it is aware
that the Shares have not been registered under the
Act and that the Shares are deemed to constitute
"restricted securities" under Rule 144 under the Act.
No royalties or milestones or additional target fees
will be due pursuant to the license under Section
2.1.1. except as provided therein.
3.1.2. As full consideration for (i) ABSC's option under
Section 2.3., (ii) ABSC's right to grant sublicenses
under Section 2.4., and (iii) ABSC's right to require
OSI to grant direct licenses under Section 2.5., ABSC
will pay to OSI a payment of two hundred and fifty
thousand dollars ($250,000) within thirty (30) days
of the Effective Date and annual payments of **, each
such annual payment being due on each anniversary of
the Effective Date. The initial $250,000 payment made
under this Section 3.1.2. shall be creditable against
the first $250,000 which ABSC is obligated to pay OSI
pursuant to Sections 3.2. and 3.4.
3.2. Compensation for Sublicenses Under The Assay Patents.
3.2.1. For each sublicense granted by ABSC under Section
2.2., for a specific Target, ABSC will pay to OSI
each year commencing on the effective date of such
sublicense and on each anniversary date thereafter
that such sublicense is in effect, the greater of **
or ** of all sublicense income received by ABSC
pursuant to Section 3 of such sublicense. OSI agrees
and acknowledges that ABSC shall retain for itself
the remainder of the sublicense income, either ** or
** of such sublicense income each year.
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3.2.2. For each sublicense granted by ABSC under Section
2.2. for an unlimited number of Targets, ABSC will
pay to OSI each year commencing on the effective date
of such sublicense and on each anniversary date
thereafter that such sublicense is in effect, the
greater of (i) ** or (ii) ** of all sublicense income
received by ABSC pursuant to Section 3 of such
sublicense. OSI agrees and acknowledges that ABSC
shall retain for itself the remainder of the
sublicense income, either ** or ** of such sublicense
income each year.
3.3. Compensation for Licenses Under the Method of Modulation
Patents.
3.3.1. For each license granted to ABSC pursuant to Section
2.3., ABSC will pay OSI each year commencing on the
effective date of such license and on each
anniversary date thereafter that such license is in
effect, an annual license fee of ** on a Target by
Target basis.
3.3.2. For the first Product directed against each such
Target that reaches the following milestone events
and for which ABSC has a license pursuant to Section
2.3., ABSC will pay OSI within 30 days of such
milestone event the following amounts:
Milestone Event Payment (US$)
i) Upon filing an IND with the FDA **
ii) Upon acceptance of the filing of
an NDA by the FDA **
3.3.3. For each Target for which ABSC is granted a license
pursuant to Section 2.3. only one payment will be
required for each such milestone event regardless of
the number of Products directed against such Target
for which ABSC achieves such milestone events.
3.3.4. For each Product directed against each Target for
which ABSC has been granted a license pursuant to
Section 2.3., ABSC will also pay to OSI a royalty of
** of Net Sales of all such Products sold by ABSC and
its Affiliates on a country by country basis. If a
human pharmaceutical product is made, used and sold
in a country where no Method of Modulation Patent
exists, it is not a Product for purposes of this
agreement and no royalty is due on its sale.
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3.4. Compensation for Sublicenses Under the Method of Modulation
Patents.
3.4.1. For each sublicense granted by ABSC pursuant to
Section 2.4.1., ABSC will pay to OSI each year
commencing on the effective date of such sublicense
and on each anniversary date thereafter that such
sublicense is in effect, for each specific Target for
which a sublicense is granted the greater of (i) **
or (ii) ** of the sublicense fees received by ABSC
pursuant to Section 3 of each such sublicense. OSI
agrees and acknowledges that ABSC shall retain for
itself the remainder of the sublicense fees, either
** or ** of such sublicense fees each year.
3.4.2. For the first Product directed against each such
Target that reaches the following milestone events
and for which ABSC has granted a sublicensee pursuant
to Section 2.4., ABSC will also pay OSI within 30
days of such milestone event the following amounts:
Milestone Event Payment (US$)
i) Upon filing an IND with the FDA **
ii) Upon acceptance of the filing of
an NDA by the FDA **
3.4.3. For each Target for which a sublicense is granted to
a specific Third Party as Sublicensee pursuant to
Section 2.4., only one payment will be required for
each such milestone event, regardless of the number
of Products directed against such Target for which
such Sublicensee achieves such milestone events.
3.4.4. For each Product directed against each Target for
which ABSC has granted a sublicense pursuant to
Section 2.4., ABSC will also pay to OSI a royalty of
** of Net Sales of all such Products sold by each
such Sublicensee and its Affiliates on a country by
country basis. If a human pharmaceutical product is
made, used and sold in a country where no Method of
Modulation Patent exists, it is not a Product for
purposes of this agreement and no royalty is due on
its sale.
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3.4.5. OSI agrees and acknowledges that ABSC shall retain
for itself any amounts paid to it by a Sublicensee in
excess of the amounts that it is required to pay OSI
pursuant to this Section 3.4.
4. ROYALTY PAYMENTS
4.1. Royalties payments due from ABSC to OSI shall be paid within
sixty (60) days after the end of each calendar quarter during
which the royalty payment accrued. Each such payment shall be
accompanied by a statement certified by an officer of ABSC
with respect to each country indicating the amount of the
payment, the total Net Sales of each Product sold in the
country and the amount of royalty due.
4.2. To the extent that it is lawful and practicable to do so, ABSC
shall make all royalty payments required under this Agreement
in the United States of America in U.S. Dollars. The royalty
payments due on each sale made outside the United States in a
currency other than U.S. Dollars shall be translated at the
rate of exchange at which U.S. Dollars are legally obtainable
at Citibank, N.A. in New York, New York, United States of
America, for the currency of the country in which the royalty
payment is accrued on the last business day of the calendar
month in which the sale was made. ABSC shall not be required
to make any royalty payment in contravention of the laws of
any country, nor shall ABSC be required to make the royalty
payment in the United States of America if ABSC is unable to
recoup the amount of such royalty or sublicense payment
directly or indirectly from the country in which the sales on
which such payment is based are made. In each country where
the local currency is blocked and cannot be removed from the
country, ABSC shall, at OSI's request, pay the royalty payment
accrued in each such country to OSI in local currency by
deposit to OSI's account at a local bank designated by OSI.
4.3. ABSC shall keep full and true books of account and records of
all sales of Product and Net Sales attributable to sales by
ABSC and its Affiliates. OSI shall have the right, at OSI's
expense, through an independent accountant reasonably approved
by ABSC to examine such books and records at any reasonable
time during business hours after notifying ABSC of its desire
to do so. Such examination shall be conducted no more often
than once each year and shall cover no more than the 3
preceding years. Such independent accountant shall report only
on the accuracy of such books and records and the reports
based thereon and shall not disclose specific entries to OSI.
5. RENEGOTIATION OF TERMS FOR FUTURE LICENSES AND SUBLICENSES UNDER THE
METHOD OF MODULATION PATENTS.
5.1. Commencing with the ** of the Effective Date ABSC's rights to
(i) exercise the option provided in Section 2.3., (ii) grant
sublicenses in accordance
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with Section 2.4., or (iii) require OSI to grant direct
licenses in accordance with Section 2.5. shall renew
thereafter as set forth below. So long as OSI has not granted
any naked, nonexclusive license under the Method of Modulation
Patents to a Third Party, ABSC's foregoing rights shall renew
on the same Terms as set forth in Sections 2.3., 2.4. and 2.5.
If prior to the ** of the Effective Date OSI has granted at
least one naked, nonexclusive license under the Method of
Modulation Patents to a Third Party, without or without a
right to grant further sublicenses, OSI shall 60 days prior to
such ** notify ABSC in writing as to the terms of whichever
such license are least favorable to OSI. ABSC shall thereafter
have the option, by notifying OSI in writing within 60 days of
receiving OSI's notification of such terms, to either
substitute such terms for those set forth herein for new
licenses or terminate its rights under Sections 2.3., 2.4. and
2.5. So long as ABSC does not terminate its rights under
Sections 2.3., 2.4. and 2.5. as of the ** or any subsequent
anniversary of the Effective Date, OSI 60 days prior to each
subsequent anniversary shall notify ABSC in writing as to the
terms of whichever then-existing, naked nonexclusive
sublicense under the Method of Modulation Patents is least
favorable to OSI. ABSC shall thereafter have the option, by
notifying OSI in writing within 60 days of receiving OSI's
notification of such terms, to either substitute such terms
for those set forth herein for new licenses or to terminate
its rights under Sections 2.3., 2.4 and 2.5. For purposes of
this Section 5.1., "naked, nonexclusive license" means a
license granted by OSI under the Method of Modulation Patents
in a transaction which only involves financial consideration
for such license. As such a naked, nonexclusive license
excludes transactions involving research, development, or
marketing collaborations as well as those involving
consideration in the form of non-publicly traded equity. OSI
and ABSC each acknowledge that the terms applicable to
Sections 2.3., 2.4. and 2.5. after the ** of the Effective
Date may be greater than, the same as, or less than, those set
forth in this Agreement as of the Effective Date.
5.2. OSI and ABSC agree that all licenses and sublicenses granted
before ABSC notifies OSI that it is exercising its option to
substitute other terms for those then applicable shall
continue to be subject to the terms under which such licenses
or sublicenses were granted. Such other terms shall apply only
to licenses and sublicenses granted subsequent to such
notification by ABSC.
5.3. ABSC shall have the right, at ABSC's expense, through an
independent accountant reasonably approved by OSI to examine
all naked, nonexclusive licenses granted by OSI under the
Method of Modulation Patents at any reasonable time during
business hours after notifying OSI of its desire to do so for
the sole purpose of verifying that OSI has notified ABSC
pursuant to Section 5.1. as to the terms of whichever such
license are least favorable to OSI. Such examination shall be
conducted no more often than once each year. Such independent
accountant shall only verify that OSI has notified ABSC as to
the
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terms of whichever such license are least favorable to OSI but
shall not disclose other specific details of such licenses to
ABSC.
6. PROTECTION AND MAINTENANCE OF PATENT RIGHTS
6.1. OSI shall have complete control, at its expense and within its
sole discretion, over the prosecution, maintenance and
enforcement of the Assay Patents and the Method of Modulation
Patents. OSI will provide ABSC and any Sub-Licensee of ABSC
with written updates on the status of the prosecution of the
Assay Patents and the Method of Modulation Patents at least
once per year.
7. REPRESENTATIONS AND WARRANTIES
7.1. Representations and Warranties of ABSC and OSI.
As of the Effective Date each party hereby represents and
warrants:
Corporate Power. Such party is duly organized and validly
existing and in good standing under the laws of the state of
its incorporation and has all requisite corporate power and
authority to enter into this Agreement and to carry out the
provisions hereof.
Due Authorization. Such party is duly authorized to execute
and deliver this Agreement and to perform its obligations
hereunder.
Binding Agreement. This Agreement is a legal and valid
obligation binding upon it and enforceable in accordance with
its terms. The execution, delivery and performance of this
Agreement by such party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative
or other agency having jurisdiction over it.
Patents. Each party acknowledges and agrees that nothing in
this Agreement shall be construed as a warranty or
representation (i) as to the validity of any claim of an Assay
Patent or Method of Modulation Patent or (ii) that any Product
is, or will be, free from infringement of patents of Third
Parties.
7.2. Representations and Warranties of ABSC.
As of the Effective Date ABSC further represents and warrants
to OSI:
Authorization. All corporate action on the part of ABSC, its
officers, directors and stockholders necessary for the
authorization, issuance and delivery of the Shares pursuant to
Section 3 of this Agreement has been taken.
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Valid Issuance of the Stock. The Shares, when delivered in
accordance with the terms herein, will be duly and validly
issued, fully paid and non-assessable, and will be free of any
liens and encumbrances.
7.3. Representations and Warranties of OSI.
As of the Effective Date OSI further represents and warrants
to ABSC:
Right to License or Sublicense. It owns all right, title and
interest in and to the Assay Patents and the Method of
Modulation Patents licensed or subject to being licensed or
sublicensed hereunder.
Patents. It has provided to ABSC a copy of each of the Assay
Patents and the Method of Modulation Patents issued or
pending. It has not granted, and during the term of this
Agreement will not grant, any right or interest in the Assay
Patents and the Method of Modulation Patents that is
inconsistent with the rights granted, or subject to being
granted, to ABSC or a Sublicensee herein. There are no
threatened or pending suits, claims, or proceedings including
interferences or opposition proceedings relating to the Assay
Patents and the Method of Modulation Patents, other than
normal patent prosecution proceedings. It does not own or hold
license rights to any patent or patent application not
included in Assay Patent and Method of Modulation Patents
which claims the same subject matter as that claimed therein.
Stock. OSI is obtaining the Shares for OSI's own account. OSI
has no present intention of distributing or selling said
Shares except as permitted under the Act. OSI is an
"accredited investor" as such term is defined in Rule 501
under the Act. OSI acknowledges and agrees the Shares may not
be sold, offered for sale, pledged, hypothecated or otherwise
transferred in the absence of an effective registration
statement under the Act with respect to such Shares or an
opinion of counsel reasonably acceptable to the Company that
such registration is not required.
7.4. Covenant Of OSI.
7.4.1. OSI covenants not to sue ABSC and its Affiliates for
infringement of a claim of a Method of Modulation
Patent based upon any activity by ABSC or its
Affiliates prior to the date on which ABSC or an
Affiliate of ABSC commences good laboratory practice
preclinical development of a compound which affects a
Target; provided that ABSC and its Affiliates prior
to such date exercise the option pursuant to Section
2.3.1. and take a license under the Method of
Modulation Patents or discontinue all activity, in
either instance with respect to such Target.
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7.4.2. OSI covenants not to sue any Third Party to which
ABSC transfers Aurora Technology or an Aurora Assay
for infringement of a claim of an Assay Patent based
upon any activity by such Third Party with respect to
a Target prior to the date 60 days after such Third
Party commences a use of such Aurora Technology or
Aurora Assay which in the absence of a license under
the Assay Patent would constitute an infringement
thereof; provided that such Third Party prior to such
date obtains a license under the Assay Patents or
discontinues all otherwise infringing activity, in
each case with respect to such Target.
7.4.3. OSI covenants not to sue any Third Party to which
ABSC has granted a sublicense under the Assay Patents
with respect to a Target pursuant to Section 2.2. for
infringement of a claim of a Method of Modulation
Patent based upon any activity by such Third Party
the date on which such Third Party commences good
laboratory practice preclinical development of a
compound which affects such Target; provided that
such Third Party prior to such date obtains a license
under the Method of Modulation Patents or
discontinues all activity, in either instance with
respect to such Target.
7.4.4. If OSI should in the future acquire rights to any
patent which claims the same subject matter as that
claimed in the Assay Patents and the Method of
Modulation Patents, OSI covenants not to sue ABSC and
its Affiliates and Sublicensees for infringement of
such patent; provided that the licenses and
sublicenses granted pursuant to this Agreement are
then, and remain thereafter, in full force and
effect.
8. CONFIDENTIALITY
8.1. Confidential Information. Except as expressly provided herein,
the parties agree that, for the Term and five (5) years
thereafter, the receiving party shall keep completely
confidential and shall not publish or otherwise disclose to
another party and shall not use for any purpose other than to
perform the purposes contemplated by this Agreement any
Confidential Information furnished to it by the disclosing
party hereto pursuant to this Agreement, except to the extent
that it can be established by the receiving party by competent
proof that such Confidential Information:
(i) was already known to the receiving party, other than
under an obligation of confidentiality, at the time
of disclosure;
(ii) was generally available to the public or otherwise
part of the public domain at the time of its
disclosure to the receiving party;
(iii) became generally available to the public or otherwise
part of the public domain after its disclosure and
other than through any act or omission of the
receiving party in breach of this Agreement;
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(iv) was lawfully disclosed to the receiving party by a
person other than a party hereto, or
(v) was independently developed by the receiving party.
8.2. Permitted Use and Disclosures. Each party hereto may use or
disclose Confidential Information disclosed to it by the other
party to the extent such use or disclosure is reasonably
necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable
law, governmental regulation or court order, submitting
information to tax or other governmental authorities, making a
permitted sublicense or otherwise exercising its rights
hereunder, provided that if a party is required to make any
such disclosure of another party's Confidential Information,
it will give reasonable advance notice to the latter party of
such disclosure and, save to the extent inappropriate in the
case of patent applications, will use reasonable efforts to
secure confidential treatment of such information prior to its
disclosure (whether through protective orders or otherwise).
8.3. Confidential Terms. Except as expressly provided herein, each
party agrees not to disclose any terms of this Agreement to
another party without the consent of the other party;
provided, however, each party reserves the right to make
reasonable disclosures as required by securities or other
applicable laws, or to actual or prospective investors or
corporate partners, or to accountants, attorneys and other
professional advisors on a need-to-know basis under
circumstances that reasonably ensure the confidentiality
thereof, or to the extent required by law. If such
Confidential Information is to become public information by
such disclosure the disclosing party must obtain the written
consent of the non-disclosing party in order to obtain
protection of the Confidential Information if necessary. The
parties agree that the terms of any sub-license for the Assay
Patents or The Methods of Modulation Patents to which ABSC is
a party shall be Confidential Information and shall not be
disclosed to any Third Party without the prior written consent
of ABSC, such consent not to be unreasonably withheld.
8.4. Press Release. Notwithstanding the foregoing, the parties
shall agree upon a press release to announce the execution of
this Agreement as set forth in Exhibit E. Thereafter, OSI and
ABSC may each disclose to Third Parties the information
contained in such press release without the need for further
approval by the other.
9. TERM AND TERMINATION
9.1. This Agreement is effective as of the Effective Date and shall
continue in full force and effect on a country by country
basis until the last expiration date of all patents
encompassed within Assay Patents and Method of Modulation
Patents. ("Term").
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9.2. Either party shall have the right to terminate this Agreement
at any time for a material breach of this Agreement by the
other party, provided that the nonbreaching party shall have
first given ninety (90) days prior written notice to the
breaching party describing such breach and stating the
nonbreaching party's intention to terminate this Agreement if
such breach remains uncured, and the breaching party
thereafter fails to cure such breach within such 90 days.
9.3. ABSC's obligation to make annual payments to OSI pursuant to
Section 3.1.2. shall continue until the expiration date of the
last Method of Modulation Patent to expire; provided that if
ABSC terminates its rights under Sections 2.3., 2.4. and 2.5.
pursuant to Section 5.1. ABSC's obligations to make such
payments shall cease following the date of any such
termination of rights by ABSC.
9.4. ABSC's obligation to make payments to OSI pursuant to Section
3.2. for each such sublicense shall commence upon the grant of
each sublicense granted under the Assay Patents to a Third
Party and shall continue until the earlier of the expiration
date of the last Assay Patent to expire or the termination of
such sublicense.
9.5. ABSC's obligation to make payments to OSI pursuant to Section
3.3., for each license granted pursuant to Section 2.3., shall
commence upon the grant of each such license granted to ABSC
for a specific Target under the Method of Modulation Patents
and shall continue until the expiration date of the last
Method of Modulation Patent to expire; provided that if ABSC
shall have terminated such license by giving OSI six months'
notice of termination and shall have discontinued all activity
with respect to such Target ABSC obligation to make payments
to OSI pursuant to Section 3.3. shall thereafter cease.
9.6. ABSC's obligation to make payments to OSI pursuant to Section
3.4., for each sublicense granted pursuant to Section 2.4.,
shall commence upon the grant of each such sublicense granted
by ABSC to a Sublicensee for a specific Target under the
Method of Modulation Patents and shall continue until the
earlier of the expiration date of the last Method of
Modulation Patent to expire or the termination of such
sublicense.
9.7. Termination of this Agreement shall not terminate either
party's obligations under Section 8, ABSC's obligations to pay
fees, royalties and sublicensing income that have accrued
prior to such termination or ABSC's obligations under Sections
4 and 10.3.
10. MISCELLANEOUS
10.1. Binding Effect; Assignment. This Agreement shall be binding
upon the parties' respective successors and permitted assigns.
Neither party may assign this Agreement or any of its rights
or obligations hereunder without the prior written
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consent of the other party (not to be unreasonably withheld)
except that either party may assign this Agreement as part of
a merger or consolidation in which the surviving entity
assumes all of the party's rights and obligations hereunder or
a sale of substantially all of the assets of such party to
which this Agreement relates.
10.2. Effect of Waiver. No waiver of any default, condition,
provisions or breach of this Agreement shall be deemed to
imply or constitute a waiver of any other default, condition,
provision or breach of this Agreement.
10.3. Indemnification. Each of OSI and ABSC shall indemnify and hold
the other harmless with respect to any injury, loss or cost
resulting from the breach of any representation or warranty
provided pursuant to Section 7.0. Further, ABSC shall
indemnify and hold OSI harmless with respect to any injury,
loss or cost resulting from the clinical testing of compounds
and the manufacture, use or sale of Products by ABSC and its
Affiliates.
10.4. Force Majeure. Neither party shall lose any rights hereunder
or be liable to the other party for damages or losses (except
for payment obligations) on account of failure of performance
by the defaulting party if the failure is occasioned by war,
strike, fire, acts of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure
of suppliers, or any other reason where failure to perform is
beyond the reasonable control and not caused by the negligence
or intentional conduct or misconduct of the nonperforming
party, and such party has exerted all reasonable efforts to
avoid or remedy such force majeure; provided, however, that in
no event shall a party be required to settle any labor dispute
or disturbance.
10.5. Amendment. No modification, supplement to or waiver of this
Agreement or any Addendum hereto or any of their provisions
shall be binding upon a party hereto unless made in writing
and duty signed by an authorized representative of both OSI
and ABSC.
10.6. Entire Agreement. This Agreement, including the Exhibits
attached hereto, sets forth the entire understanding and
agreement of the parties as to the subject matter hereof, and
there are no other understandings, representations or
promises, written or verbal, not set forth herein on which
either party has relied.
10.7. Notices. All Notices under this Agreement shall be given in
writing and shall be addressed to the parties at the following
addresses:
For OSI: OSI Pharmaceuticals, Inc.
106 Charles Lindbergh Blvd.
Uniondale, New York 11553
Attn: President
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For ABSC: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, California 92121
Attn: President
Notices shall be in writing and shall be deemed delivered when
received, if delivered by a courier, or on the second business
day following mailing, if sent by first-class certified or
registered mail, postage prepaid, and return receipt
requested.
10.8. Arbitration. The parties recognize that disputes as to certain
matters may from time to time arise during the term of this
Agreement which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to
establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual
cooperation without resort to arbitration. The parties agree
that prior to any arbitration concerning this Agreement, OSI's
CEO and ABSC's CEO will meet in person or by
video-conferencing in a good faith effort to resolve any
disputes concerning this Agreement, such meeting to be held
within 30 days after notice is received by one party from the
other requesting such a meeting. Except as otherwise provided
specifically herein, any controversy or claim under this
Agreement except a claim as to the scope, validity or
enforcement of a claim of an Assay Patent or a Method of
Modulation Patent shall be settled solely by arbitration by
one arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association (the "Association");
provided that the parties shall first have used their best
efforts to resolve such dispute by negotiation as set forth
above. ** The arbitrator shall be selected by the joint
agreement of the parties, but if they do not so agree within
twenty (20) days of the date of a request for arbitration, the
selection shall be made pursuant to the rules of the
Association. The decision reached by the arbitrator shall be
conclusive and binding upon the parties hereto and may be
filed with the clerk of any court of competent jurisdiction,
and a judgment confirming such decision may, if desired by any
party to the arbitration, be entered in such court. Each of
the parties shall pay its own expenses of arbitration and the
expenses of the arbitrator(s) shall be equally shared;
provided, however, that if in the opinion of the arbitrator(s)
any claim hereunder or any defense or objection thereto was
unreasonable, the arbitrator(s) may assess, as part of the
award, all or any part of the arbitration expenses (including
reasonable attorneys' fees) against the party raising such
unreasonable claim, defense or objection. Nothing herein set
forth shall prevent the parties from settling any dispute by
mutual agreement at any time.
10.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, applicable to agreements
__________
** This portion has been redacted pursuant to a request for confidential
treatment.
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made in New York without regard, or giving effect, to its
principles of conflict of laws.
10.10. Severability. This Agreement is intended to be severable. If
any provision(s) of this Agreement are or become invalid, are
ruled illegal by a court of competent jurisdiction or are
deemed unenforceable under the current applicable law from
time to time in effect during the term hereof, it is the
intention of the parties that the remainder of the Agreement
shall not be affected thereby and shall continue to be
construed to the maximum extent permitted by law at such time.
It is further the intention of the parties that in lieu of
each such provision which is invalid, illegal, or
unenforceable, there shall be substituted or added as part of
this Agreement by such court of competent jurisdiction a
provision which shall be as similar as possible in terms of
the economic and business objectives intended by the parties,
to such invalid, illegal or unenforceable provision, but shall
be valid, legal and enforceable.
10.11. Independent Contractors. The parties hereto are acting as
independent contractors and shall not be considered partners,
joint venturers or agents of the other. Except as expressly
provided herein, neither party shall have the right to act on
behalf of, or to bind, the other.
10.12. Headings. Captions and paragraph headings are for convenience
only and shall not form an interpretative part of this
Agreement. This Agreement shall not be strictly construed
against either party hereto and may be executed in two or more
counterparts, each of which will be deemed an original.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
By: /s/ Colin Goddard, Ph.D. Date: 22- May-98
--------------------------- -----------------
Colin Goddard, Ph.D.
President
For OSI Pharmaceuticals, Inc.
By: /s/ Paul A. Grayson Date: 22 - May - 98
--------------------------- -----------------
Paul A. Grayson
Senior Vice President/Corporate Development
For Aurora Biosciences Corporation
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Exhibit A
U.S. Serial No. Status Patent No. If Applicable
** ** **
- ------------------
** This portion has been redacted pursuant to a request for confidential
treatment.
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EXHIBIT B
ASSAY PATENTS
SUBLICENSE AGREEMENT
This Agreement is made this _______ day of _______ (the "Effective Date"), by
and between Aurora Biosciences Corporation ("ABSC"), a Delaware corporation with
principal offices at 11010 Torreyana Road, San Diego, California 92121 and
___________________ ("Sublicensee"), a ________ corporation with principal
offices at__________________________________.
RECITALS
WHEREAS, ABSC is a licensee under the Assay Patents defined herein, pursuant to
a License Agreement dated May ___, 1998 with OSI Pharmaceuticals, Inc. ("OSI"),
the assignee of the Assay Patents; and is willing to grant a sublicense under
such patents to Sublicensee; and
WHEREAS, Sublicensee wishes to obtain a sublicense from ABSC under the Assay
Patents, according to the terms contained herein;
Now, therefore, in consideration of the covenants and premises contained herein,
the parties agree as follows:
1. DEFINITIONS
1.1. "Affiliate" means any corporation or other business entity
controlled by or under common control with, a party to this
Agreement. Control, as used in the context of a business
entity, means the ownership, directly or indirectly, of fifty
percent (50%), or greater, or the maximum interest permitted
by local law of the voting securities of the corporation or
other entity or a fifty percent (50%) or greater interest in
the income of such corporation or other entity or the ability
otherwise to manage the affairs of such corporation or other
entity.
1.2. "Assay Patents" means the U.S. patents and patent applications
listed on Exhibit A hereto, any patent applications filed
prior or subsequent to the Effective Date that claim the
benefit of the filing date of any patent application listed in
Exhibit A and any reissues, extensions, substitutions,
confirmations, re-registrations, re-examinations,
continuations, divisionals or continuations-in-part of the
foregoing patents and patent applications, as well as all
foreign counterparts thereof, to the extent that such patents
and patent applications are not Method of Modulation Patents.
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1.3. "Aurora Assay" means ** .
1.4. "Aurora Technology" means all Technology owned or controlled
by ABSC which is not an Aurora Assay.
1.5. "Confidential Information" means all information received by
either party from the other party pursuant to this Agreement,
which is deemed confidential by the disclosing party and is
designated confidential at the time the information is
disclosed, subject to the exceptions set forth in Section 6.
1.
1.6. "Cosmeceuticals" means compounds, or assays for discovering
compounds, useful for (a) stimulation or control of hair
growth, (b) prevention or reversal of wrinkling of the skin,
or (c) alteration of skin or hair pigmentation, in each case
in human subjects.
1.7. "Intellectual Property" means any information and data which
is not generally known to the public, any new and useful
process, machine, manufacture, or composition of matter, or
improvement thereto, whether or not patentable, designs,
concepts, algorithms, formulae, software, techniques,
practices, processes, methods, knowledge, skill, experience,
expertise and technical information; copyrights; trade
secrets; or patent rights (including pending and issued patent
rights anywhere in the world).
1.8. "Materials" means any biological or chemical entity for
screening or assays, including reagents, cells, promoters,
enhancers, vectors, plasmids, proteins and fragments thereof,
peptides, antigens, antibodies, antagonists, agonists,
inhibitors, and chemicals.
1.9. "Method of Modulation Patents" means the U.S. patents and
patent applications listed on Exhibit A hereto, any patent
applications filed prior or subsequent to the Effective Date
that claim the benefit of the filing date of any patent
application listed in Exhibit A, and any reissues, extensions,
substitutions, confirmations, re-registrations,
re-examinations, continuations, divisionals or
continuations-in-part of the foregoing patents and patent
applications, as well as all foreign counterparts thereof, to
the extent such patents and patent applications claim an in
vivo method of modulation of a gene of interest or a
composition useful in such a method.
1.10. "Sub-Licensee" means the party so identified and first above
named.
1.11. "Target" means a specific gene.
1.12. "Technology" means Materials, Intellectual Property, or both.
- -----------------
** This portion has been redacted pursuant to a request for confidential
treatment.
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1.13. "Term" has the meaning set forth in Section 7.1.1.
1.14. "Third Party" means any entity other than (i) ABSC and any of
its Affiliates and (ii) Sub-Licensee and any of its
Affiliates.
2. SUBLICENSE
2.1. Sublicense Under the Assay Patents.
2.1.1. Subject to any limitations as to the number and
identity of Targets pursuant to Section 2.1.2., ABSC
hereby grants to Sublicensee and its Affiliates, for
all fields except the field of specifically
discovering or developing Cosmeceuticals, a
nonexclusive, worldwide sublicense, without the right
to grant subsublicenses, under the Assay Patents (i)
to make or use any method, device or composition of
matter encompassed within, using or incorporating,
Aurora Technology or an Aurora Assay and (ii) to
make, use, have made, sell, offer for sale, import,
export, or otherwise exploit any compound which
results from the use of Aurora Technology or an
Aurora Assay by Sublicensee or an Affiliate of
Sublicensee; provided that such making, using, having
made, selling, offering for sale, importing,
exporting, or otherwise exploiting such compound
resulting from the use by Sublicensee or an Affiliate
of Sublicensee of Aurora Technology or an Aurora
Assay does not require a license under the Method of
Modulation Patents in which event a separate license
or sub-license under the Method of Modulation Patents
is required for which compensation will be due
pursuant to the terms of such separate license or
sub-license.
(ABSC MAY DELETE SECTION 2.1.2. IF NOT APPLICABLE ie.
WHEN THE SUB-LICENSE IS FOR AN UNLIMITED NUMBER OF
TARGETS)
2.1.2. Sublicensee's sublicense granted pursuant to Section
2.1.1. shall be limited to the specific Target or
Targets set forth on Exhibit B hereto, which Targets
may be identified by code numbers.
2.1.3. ABSC agrees that if in the future ABSC obtains rights
in the field of Cosmeceuticals because the field of
Cosmeceuticals ceases to be the subject of an
exclusive license grant by OSI to the Third Party
licensed as of the Effective Date of the License
Agreement between OSI and ABSC, the scope of
Sublicensee's nonexclusive sublicense under Section
2.1.1 shall be expanded to include Cosmeceuticals
without any additional consideration being provided
to ABSC by Sublicensee other than that already
provided for herein.
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2.1.4. ABSC shall within 30 days after entering into this
Agreement provide to OSI a copy thereof, provided,
however, that the specific Target(s) to which this
Agreement relates may be identified by code numbers
if the Sublicensee so desires.
3. COMPENSATION
3.1. Compensation for Sublicense Under the Assay Patents.
(ABSC MAY DELETE WHICHEVER VERSION OF SECTION 3.1.1. IS NOT
APPLICABLE. MOREOVER, IN ADDITION TO THE PAYMENT SPECIFICALLY
PROVIDED FOR IN SECTION 3.1.1 ABSC MAY INCLUDE A PROVISION IN
THIS SECTION 3 FOR AN UPFRONT SUB-LICENSING FEE.)
3.1.1. For each specific Target for which a sublicense is
granted by ABSC pursuant to Section 2.1.1. for the
limited number of Targets which are identified on
Exhibit B hereto, Sublicensee will pay to ABSC each
year commencing on the Effective Date of this
Agreement and on each anniversary date thereafter
that this Agreement is in effect, _________ Dollars
($____________) per Target.
3.1.1 For each sublicense granted by ABSC under Section
2.1.1. for an unlimited number of Targets,
Sublicensee will pay to ABSC each year commencing on
the Effective Date of this Agreement, and on each
anniversary date thereafter that this Agreement is in
effect, _________ Dollars ($____________) per Target.
4. PROTECTION AND MAINTENANCE OF PATENT RIGHTS
4.1. Sublicensee acknowledges and agrees that OSI shall have
complete control, at its expense and within its sole
discretion, over the prosecution, maintenance and enforcement
of the Assay Patents. ABSC directly or through OSI, will
provide Sublicensee with written updates on the status of the
prosecution of the Assay Patents at least once per year
5. REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of ABSC and Sublicensee
As of the Effective Date each party hereby represents and
warrants:
Corporate Power. Such party is duly organized and validly
existing and in good standing under the laws of the state of
its incorporation and has all requisite
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corporate power and authority to enter into this Agreement and
to carry out the provisions hereof.
Due Authorization. Such party is duly authorized to execute
and deliver this Agreement and to perform its obligations
hereunder.
Binding Agreement. This Agreement is a legal and valid
obligation binding upon it and enforceable in accordance with
its terms. The execution, delivery and performance of this
Agreement by such party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative
or other agency having jurisdiction over it.
Patents. Each party acknowledges and agrees that nothing in
this Agreement shall be construed as a warranty or
representation (i) as to the validity of any claim of an Assay
Patent or (ii) that any activity by Sublicensee is, or will
be, free from infringement of patents of Third Parties.
5.2. Representations and Warranties of ABSC.
As of the Effective Date ABSC further represents and warrants
to Sublicensee that it has a license under the Assay Patents
and the right to grant the Sublicense being granted hereunder,
subject to Sublicensee's representations and warranties in
Section 5.3 being correct and valid.
5.3. Representations and Warranties of Sublicensee.
As of the Effective Date Sublicensee further represents and
warrants to ABSC and to OSI that neither Sublicensee nor any
Affiliate of Sublicensee commenced, more than 90 days prior to
the Effective Date of this Agreement, any use of Aurora
Technology or an Aurora Assay which, in the absence of this
Agreement, would have constituted an infringement of a claim
of an Assay Patent.
6. CONFIDENTIALITY
6.1. Confidential Information. Except as expressly provided herein,
the parties agree that, for the Term and five (5) years
thereafter, the receiving party shall keep completely
confidential and shall not publish or otherwise disclose to
another party and shall not use for any purpose other than to
perform the purposes contemplated by this Agreement any
Confidential Information furnished to it by the disclosing
party hereto pursuant to this Agreement, except to the extent
that it can be established by the receiving party by competent
proof that such Confidential Information:
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(i) was already known to the receiving party, other than
under an obligation of confidentiality, at the time
of disclosure;
(ii) was generally available to the public or otherwise
part of the public domain at the time of its
disclosure to the receiving party;
(iii) became generally available to the public or otherwise
part of the public domain after its disclosure and
other than through any act or omission of the
receiving party in breach of this Agreement;
(iv) was lawfully disclosed to the receiving party by a
person other than a party hereto, or
(v) was independently developed by the receiving party.
6.2. Permitted Use and Disclosures. Each party hereto may use or
disclose Confidential Information disclosed to it by the other
party to the extent such use or disclosure is reasonably
necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable
law, governmental regulation or court order, submitting
information to tax or other governmental authorities, making a
permitted sublicense or otherwise exercising its rights
hereunder, provided that if a party is required to make any
such disclosure of another party's Confidential Information,
it will give reasonable advance notice to the latter party of
such disclosure and, save to the extent inappropriate in the
case of patent applications, will use reasonable efforts to
secure confidential treatment of such information prior to its
disclosure (whether through protective orders or otherwise).
6.3. Confidential Terms. Except as expressly provided herein, each
party agrees not to disclose any terms of this Agreement to
another party other than OSI without the consent of the other
party; provided, however, each party reserves the right to
make reasonable disclosures as required by securities or other
applicable laws, or to actual or prospective investors or
corporate partners, or to accountants, attorneys and other
professional advisors on a need-to-know basis under
circumstances that reasonably ensure the confidentiality
thereof, or to the extent required by law. If such
Confidential Information is to become public information by
such disclosure the disclosing party must obtain the written
consent of the non-disclosing party in order to obtain
protection of the Confidential Information if necessary.
7. TERM AND TERMINATION
7.1. Unless terminated earlier, this Agreement and Sublicensee's
obligations to make payments to ABSC pursuant to Section 3.1.
is effective as of the Effective Date and shall continue in
full force and effect on a country by country basis until the
last expiration date of all patents encompassed within the
Assay Patents ("Term").
7.2. Either party shall have the right to terminate this Agreement
at any time for a material breach of this Agreement by the
other party, provided that the
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nonbreaching party shall have first given ninety (90) days
prior written notice to the breaching party describing such
breach and stating the nonbreaching party's intention to
terminate this Agreement if such breach remains uncured, and
the breaching party thereafter fails to cure such breach
within such 90 days.
7.3. Sublicensee may terminate this Agreement by giving ABSC six
months' prior written notice of termination; provided that
Sublicensee shall not thereafter continue to develop, make,
use, have made, sell, offer for sale, import, export or
otherwise exploit any compound which results from a use of
Aurora Technology or an Aurora Assay by or on behalf of
Sublicensee or an Affiliate of Sublicensee and which is
directed against any Target embodied in such Aurora Technology
or Aurora Assay, if such use would in the absence of this
Agreement have constituted an infringement of a claim of an
Assay Patent. However, Sublicensee may independently develop
the same compound for a different Target.
7.4. Termination of this Agreement shall not terminate either
party's obligations under Section 6, Sublicensee's obligations
to pay fees under Section 3 that have accrued prior to such
termination or Sublicensee's obligations under Section 8.3.
8. MISCELLANEOUS
8.1. Binding Effect: Assignment. This Agreement shall be binding
upon the parties' respective successors and permitted assigns.
Neither party may assign this Agreement or any of its rights
or obligations hereunder without the prior written consent of
the other party (not to be unreasonably withheld) except that
either party may assign this Agreement as part of a merger or
consolidation in which the surviving entity assumes all of the
party's rights and obligations hereunder or a sale of
substantially all of the assets of such party to which this
Agreement relates.
8.2. Effect of Waiver. No waiver of any default, condition,
provisions or breach of this Agreement shall be deemed to
imply or constitute a waiver of any other default, condition,
provision or breach of this Agreement.
8.3. Indemnification. Each of ABSC and Sublicensee shall indemnify
and hold the other and OSI harmless with respect to any
injury, loss or cost resulting from the breach of any
representation or warranty provided pursuant to Section 5.0.
Further, Sublicensee shall indemnify and hold ABSC and OSI
harmless with respect to any injury, loss or cost resulting
from the clinical testing of compounds, the manufacture, use
or sale of products by Sublicensee and its Affiliates, and any
other activity carried out pursuant to the right license
herein.
8.4. Force Majeure. Neither party shall lose any rights hereunder
nor be liable to the other party for damages or losses (except
for payment obligations) on account of failure of performance
by the defaulting party if the failure is occasioned by war,
strike, fire, acts of God, earthquake, flood, lockout,
embargo, governmental acts
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34
or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable
control and not caused by the negligence or intentional
conduct or misconduct of the nonperforming party, and such
party has exerted all reasonable efforts to avoid or remedy
such force majeure; provided, however, that in no event shall
a party be required to settle any labor dispute or
disturbance.
8.5. Amendment. No modification, supplement to or waiver of this
Agreement or any Addendum hereto or any of their provisions
shall be binding upon a party hereto unless (i) made in
writing, (ii) duly signed by an authorized representative of
both ABSC and Sublicensee, and (iii) consented to by OSI, such
consent not to be unreasonably withheld.
8.6. Entire Agreement. This Agreement, including the Exhibits
attached hereto, sets forth the entire understanding and
agreement of the parties as to the subject matter hereof, and
there are no other understandings, representations, or
promises, written or verbal, not set forth herein or on which
either party has relied.
8.7. Notices. All notices under this Agreement shall be given in
writing and shall be addressed to the parties at the following
addresses:
For Sublicensee:
For ABSC: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, California 92121
Attn: President
Copies of all notices shall be sent to OSI at the following
address:
OSI Pharmaceuticals, Inc.
106 Charles Lindbergh Blvd.
Uniondale, New York 1 1553
Attn: President
Notices shall be in writing and shall be deemed delivered when
received, if delivered by a courier, or on the second business
day following mailing, if sent by first-class certified or
registered mail, postage prepaid, and return receipt
requested.
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35
8.8. Arbitration. The parties recognize that disputes as to certain
matters may from time to time arise during the term of this
Agreement which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to
establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual
cooperation without resort to arbitration. The parties agree
that prior to any arbitration concerning this Agreement,
ABSC's CEO and Sublicensees's CEO will meet in person or by
video-conferencing in a good faith effort to resolve any
disputes concerning this Agreement, such meeting to be held
within 30 days after notice is received by one party from the
other requesting such a meeting. Except as otherwise provided
specifically herein, any controversy or claim under this
Agreement except a claim as to the scope, validity or
enforcement of a claim of an Assay Patent or a Method of
Modulation Patent shall be settled solely by arbitration by
one arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association (the "Association");
provided that the parties shall first have used their best
efforts to resolve such dispute by negotiation as set forth
above. The arbitration shall be conducted in **. The
arbitrator shall be selected by the joint agreement of the
parties, but if they do not so agree within twenty (20) days
of the date of a request for arbitration, the selection shall
be made pursuant to the rules of the Association. The decision
reached by the arbitrator shall be conclusive and binding upon
the parties hereto and may be filed with the clerk of any
court of competent jurisdiction, and a judgment confirming
such decision may, if desired by any party to the arbitration,
be entered in such court. Each of the parties shall pay its
own expenses of arbitration and the expenses of the
arbitrator(s) shall be equally shared, provided, however, that
if in the opinion of the arbitrator(s) any claim hereunder or
any defense or objection thereto was unreasonable, the
arbitrator(s) may assess, as part of the award, all or any
part of the arbitration expenses (including reasonable
attorneys' fees) against the party raising such unreasonable
claim, defense or objection. Nothing herein set forth shall
prevent the parties from settling any dispute by mutual
agreement at any time.
8.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, applicable to agreements made in New York without
regard, or giving effect, to its principles of conflict of
laws.
8.10. Severability. This Agreement is intended to be severable. If
any provision(s) of this Agreement are or become invalid, are
ruled illegal by a court of competent jurisdiction or are
deemed unenforceable under the current applicable law from
time to time in effect during the term hereof, it is the
intention of the parties that the remainder of the Agreement
shall not be affected thereby and shall continue to be
construed to the maximum extent permitted by law at such time.
It is further the intention of the parties that in lieu of
each such provision which is invalid, illegal, or
unenforceable, there shall be substituted or added as part of
this Agreement by such court of competent jurisdiction a
provision which shall be as
__________
** This portion has been redacted pursuant to a request for confidential
treatment.
9
36
similar as possible in terms of the economic and business
objectives intended by the parties, to such invalid, illegal
or unenforceable provision, but shall be valid, legal and
enforceable.
8.11. Independent Contractors. The parties hereto are acting as
independent contractors and shall not be considered partners,
joint venturers or agents of the other. Neither party shall
have the right to act on behalf of, or to bind, the other.
8.12. Headings. Captions and paragraph headings are for convenience
only and shall not form an interpretative part of this
Agreement. This Agreement shall not be strictly construed
against either party hereto and may be executed in two or more
counterparts, each of which will be deemed an original.
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37
IN WITNESS WHEREOF, the parties have executed this Agreement.
By: Date:
------------------------------- --------------------
Name:
Title:
For Sublicensee
By: Date:
------------------------------- --------------------
Timothy J. Rink M.D., Sc.D.
President, CEO and Chairman
For Aurora Biosciences Corporation
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EXHIBIT C
EXCLUDED OSI TARGETS
**
- ------------------
** This portion has been redacted pursuant to a request for confidential
treatment.
1
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EXHIBIT D
METHOD OF MODULATION PATENTS
SUBLICENSE AGREEMENT
This Agreement is made this ______ day of _________ (the "Effective Date"), by
and between Aurora Biosciences Corporation ("ABSC"), a Delaware corporation with
principal offices at 11010 Torreyana Road, San Diego, California 92121 and
____________________ ("Sublicensee"), a _______ corporation with principal
offices at ____________________________.
RECITALS
WHEREAS, ABSC is a licensee under the Method of Modulation Patents defined
herein, pursuant to a License Agreement dated May _, 1998 with OSI
Pharmaceuticals, Inc. ("OSI"), the assignee of the Method of Modulation Patents;
and is willing to grant a sublicense under such patents to Sublicensee; and
WHEREAS, Sublicensee wishes to obtain a sublicense from ABSC under the Method of
Modulation Patents, according to the terms contained herein;
Now, therefore, in consideration of the covenants and premises contained herein,
the parties agree as follows:
1. DEFINITIONS
1.1. "Affiliate" means any corporation or other business entity
controlled by or under common control with, a party to this
Agreement. Control, as used in the context of a business
entity, means the ownership, directly or indirectly, of fifty
percent (50%), or greater, or the maximum interest permitted
by local law of the voting securities of the corporation or
other entity or a fifty percent (50%) or greater interest in
the income of such corporation or other entity or the ability
otherwise to manage the affairs of such corporation or other
entity.
1.2. "Assay Patents" means the U.S. patents and patent applications
listed on Exhibit A hereto, any patent applications filed
prior or subsequent to the Effective Date that claim the
benefit of the filing date of any patent application listed in
Exhibit A and any reissues, extensions, substitutions,
confirmations, re-registrations, re-examinations,
continuations, divisionals or continuations-in-part of the
foregoing patents and patent applications, as well as all
foreign counterparts thereof, to the extent that such patents
and patent applications are not Method of Modulation Patents.
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40
1.3. "Aurora Assay" means ** .
1.4. "Aurora Technology" means all Technology owned or controlled
by ABSC which is not an Aurora Assay.
1.5. "Confidential Information" means all information received by
either party from the other party pursuant to this Agreement,
which is deemed confidential by the disclosing party and is
designated confidential at the time the information is
disclosed, subject to the exceptions set forth in Section 7.1.
1.6. "Cosmeceuticals" means compounds, or assays for discovering
compounds, useful for (a) stimulation or control of hair
growth, (b) prevention or reversal of wrinkling of the skin,
or (c) alteration of skin or hair pigmentation, in each case
in human subjects.
1.7. "FDA" means the United States Food and Drug Administration, or
any successor agency having regulatory jurisdiction over the
manufacture, distribution and sale of drugs in the United
States or the equivalent agency in any other country.
1.8. "IND" means an Investigational New Drug application in the
United States or the equivalent application in any other
country.
1.9. "Intellectual Property" means any information and data which
is not generally known to the public, any new and useful
process, machine, manufacture, or composition of matter, or
improvement thereto, whether or not patentable, designs,
concepts, algorithms, formulae, software, techniques,
practices, processes, methods, knowledge, skill, experience,
expertise and technical information; copyrights; trade
secrets; or patent rights (including pending and issued patent
rights anywhere in the world).
1.10. "Materials" means any biological or chemical entity for
screening or assays, including reagents, cells, promoters,
enhancers, vectors, plasmids, proteins and fragments thereof,
peptides, antigens, antibodies, antagonists, agonists,
inhibitors, and chemicals.
1.11. "Method of Modulation Patents" means the U.S. patents and
patent applications listed on Exhibit A hereto, any patent
applications filed prior or subsequent to the Effective Date
that claim the benefit of the filing date of any patent
application listed in Exhibit A, and any reissues, extensions,
substitutions, confirmations, re-registrations,
re-examinations, continuations, divisionals or
continuations-in-part of the foregoing patents and patent
applications, as well as all foreign counterparts thereof, to
the extent such patents and patent applications claim an in
vivo method of modulation of a gene of interest or a
composition useful in such a method.
- ------------------
** This portion has been redacted pursuant to a request for confidential
treatment.
2
41
1.12. "NDA" means a New Drug Application or Product License
Application, as appropriate, in the United States or the
equivalent application in any other country.
1.13. "Net Sales" means the gross amounts actually received by
Sublicensee and its Affiliates and subsublicensees from arms'
length sales of Product(s) to Third Parties whether invoiced
or not, less:
(i) Trade, quantity and cash discounts allowed;
(ii) Refunds, rebates, chargebacks, retroactive price
adjustments, and any other allowances which
effectively reduce the net selling price and are
appropriately deducted from sales under generally
accepted accounting principles;
(iii) Product returns and allowances;
(iv) Any tax imposed on the Product that is appropriately
deducted from sales under generally accepted
accounting principles;
(v) That portion of the amount received associated with
mechanical drug delivery devices; and
(vi) Allowance for distribution expenses.
Such amounts shall be determined from the books and records of
Sublicensee and its Affiliates and subsublicensees, as
appropriate, maintained in accordance with generally accepted
accounting principles ("GAAP"), consistently applied.
In the event a Product is sold in combination with another
product(s), the Net Sales from the combination product, for
the purposes of determining royalty payments, shall be
determined by multiplying the Net Sales of the combination
product by the fraction, A/(A+B) where A is the average sale
price of the Product when sold separately and B is the average
sale price of the other product(s) when sold separately in
finished form. In the event that such average sale price
cannot be determined for either the Product or other
product(s) in such combination product, Net Sales for purposes
of determining royalty payments shall be calculated by
multiplying the Net Sales of the combination product by the
fraction C/(C+D) where C is the cost of manufacturing the
Product and D is the cost of manufacturing the other
product(s), determined in accordance with GAAP, consistently
applied.
1.14. "Product" means any human pharmaceutical product sold by
Sub-Licensees and/or its Affiliate and/or sub-sub-licensees to
a Third Party, the manufacture, use, importation or sale of
which in a specific country would in the absence of this
Agreement infringe an issued or granted claim in a Method of
Modulation Patent in such country and which was discovered or
developed by an activity which in
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42
the absence of a license would infringe an issued or granted
claim in an Assay Patent.
1.15. "Sub-Licensee" means the party so identified and so above
named.
1.16. "Target" means a specific gene.
1.17. "Technology" means Materials, Intellectual Property, or both.
1.18. "Term" has the meaning set forth in Section 8.1.1.
1.19. "Third Party" means any entity other than (i) ABSC and any of
its Affiliates and (ii) Sublicensee and any of its Affiliates.
2. SUBLICENSE
2.1. Sublicense Under the Methods of Modulation Patents.
2.1.1. ABSC hereby grants to Sublicensee and its Affiliates,
for the specific Target listed in Exhibit B which is
neither (i) a Target for use in the field of
Cosmeceuticals which is excluded nor (ii) a Target
listed in Exhibit C, either as of the Effective Date
or within 12 months of the Effective Date, which also
is excluded, a non-exclusive, royalty-bearing,
worldwide license under the Method of Modulation
Patents to conduct research and development
concerning (but not to commercialize) one or more
compounds which are prospective Products directed
against such specific Target, and to make, use, have
made, sell, offer for sale, import, export, or
otherwise exploit any Product directed against such
specific Target, including treatment of humans with,
and in vivo administration for good laboratory
practice, preclinical development of, such
Products.
2.1.2. ABSC shall within 30 days after entering into this
Agreement provide to OSI a copy thereof.
4
43
2.2. Right To Grant Subsublicenses Under The Method of Modulation
Patents.
2.2.1. ABSC hereby grants Sublicensee the right to grant to
certain Third Parties and their Affiliates, for the
specific Target listed in Exhibit B a subsublicensee
under the Method of Modulation Patents to make, use,
have made, sell, offer for sale, import, export, or
otherwise exploit any Product directed against such
specific Target, including treatment of humans with,
and in vivo administration for good laboratory
practice pre-clinical development of, such products.
2.2.2. Subsublicenses under Section 2.2.1. may be granted by
Sublicensee to any Third Party to which Sublicensee
has licensed or otherwise transferred its rights to
develop a Product directed against a specific Target
for which Sublicensee has a sublicense pursuant to
Section 2.1.1.; provided that Sublicensee's
obligations under this Agreement, including its
obligations under Section 3 shall continue and that
Sublicensee shall guarantee the performance by its
subsublicensee of all of subsublicensee's obligations
under any such subsublicense.
2.2.3. Sublicensee shall within 30 days after entering into
any subsublicense under the Method of Modulation
Patents provide to ABSC and to OSI a copy thereof.
3. COMPENSATION
(ABSC, IN ADDITION TO THE PAYMENT SPECIFICALLY PROVIDED FOR IN THIS
SECTION 3.1. MAY INCLUDE IN THIS SECTION 3 A PROVISION FOR AN UPFRONT
SUB-LICENSING FEE.)
3.1. Compensation for Sublicenses Under the Method of Modulation
Patents.
3.1.1. For the sublicenses granted to Sublicensee pursuant
to Section 2.1.1. for the specific Target listed in
Exhibit B Sublicensee will pay ABSC each year
commencing on the Effective Date of this Agreement
and on each anniversary date thereafter that such
sublicense is in effect, an annual license fee of
________________ dollars ($_____ ).
3.1.2. For the first Product directed against such Target
that reaches the following milestone events
Sublicensee will also pay ABSC within 30 days of such
milestone event the following amounts:
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44
Milestone Event Payment (US$)
--------------- ------- -----
i) Upon filing an IND with the FDA ________
ii) Upon acceptance of the filing of
an NDA by the FDA ________
3.1.3. For such Target only one payment will be required for
each such milestone event regardless of the number of
Products directed against such Target for which
Sublicensee achieves such milestone events.
3.1.4. For each Product directed against such Target
Sublicensee will also pay to ABSC a royalty of _____
percent (_%) of Net Sales of all such Products sold
by Sublicensee and its Affiliates and subsublicensees
on a country by country basis.
4. ROYALTY PAYMENTS
4.1. Royalties payments due from Sublicensee to ABSC shall be paid
within sixty (60) days after the end of each calendar quarter
during which the royalty payment accrued. Each such payment
shall be accompanied by a statement certified by an officer of
Sublicensee with respect to each country indicating the amount
of the payment, the total Net Sales of each Product sold in
the country and the amount of royalty due.
4.2. To the extent that it is lawful and practicable to do so,
Sublicensee shall make all royalty payments required under
this Agreement in the United States of America in U.S.
Dollars. The royalty payments due on each sale made outside
the United States in a currency other than U.S. Dollars shall
be translated at the rate of exchange at which U.S. Dollars
are legally obtainable at Citibank, N.A. in New York, New
York, United States of America, for the currency of the
country in which the royalty payment is accrued on the last
business day of the calendar month in which the sale was made.
Sublicensee shall not be required to make any royalty payment
in contravention of the laws of any country, nor shall
Sublicensee be required to make the royalty payment in the
United States of America if Sublicensee is unable to recoup
the amount of such royalty or sublicense payment directly or
indirectly from the country in which the sales on which such
payment is based are made. In each country where the local
currency is blocked and cannot be removed from the country,
Sublicensee shall, at ABSC's request, pay the royalty payment
accrued in each such country to ABSC in local currency by
deposit to ABSC's account at a local bank designated by ABSC.
4.3. Sublicensee shall keep full and true books of account and
records of all sales of Product and Net Sales attributable to
sales by Sublicensee and its Affiliates and subsublicensees.
ABSC shall have the right, at ABSC's expense, through an
independent accountant reasonably approved by Sublicensee to
examine such
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45
books and records at any reasonable time during business hours
after notifying Sublicensee of its desire to do so. Such
examination shall be conducted no more often than once each
year and shall cover no more than the 3 preceding years. Such
independent accountant shall report only on the accuracy of
such books and records and the reports based thereon and shall
not disclose specific entries to ABSC.
5. PROTECTION AND MAINTENANCE OF PATENT RIGHTS
5.1. Sublicensee acknowledges and agrees that OSI shall have
complete control, at its expense and within its sole
discretion, over the prosecution, maintenance and enforcement
of the Assay Patents and the Method of Modulation Patents.
ABSC directly, or through OSI, will provide Sublicensee with
written updates on the status of the prosecution of the Method
of Modulation Patents at least once per year.
6. REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of ABSC and Sublicensee.
As of the Effective Date each party hereby represents and
warrants:
Corporate Power. Such party is duly organized and validly
existing and in good standing under the laws of the state of
its incorporation and has all requisite corporate power and
authority to enter into this Agreement and to carry out the
provisions hereof.
Due Authorization. Such party is duly authorized to execute
and deliver this Agreement and to perform its obligations
hereunder.
Binding Agreement. This Agreement is a legal and valid
obligation binding upon it and enforceable in accordance with
its terms. The execution, delivery and performance of this
Agreement by such party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative
or other agency having jurisdiction over it.
Patents. Each party acknowledges and agrees that nothing in
this Agreement shall be construed as a warranty or
representation (i) as to the validity of any claim of a Method
of Modulation Patent or (ii) that any activity by Sublicensee
including the manufacture, use or sale of Product is, or will
be, free from infringement of patents of Third Parties.
7
46
6.2. Representations and Warranties of ABSC.
As of the Effective Date ABSC further represents and warrants
to Sublicensee that it has a license under the Method of
Modulation Patents and the right to grant the sublicense being
granted hereunder, subject to sub-licensees, representations
and warranties in Section 6.3 being correct and valid.
6.3. Representations and Warranties of Sublicensee.
As of the Effective Date Sublicensee further represents and
warrants to ABSC and to OSI that neither Sublicensee nor any
Affiliate of Sublicensee, prior to the Effective Date,
commenced good laboratory practice preclinical development of
a compound directed against such specific Target and which has
resulted from use of Aurora Technology or an Aurora Assay by
Sublicensee or an Affiliate of Sublicensee.
7. CONFIDENTIALITY
7.1. Confidential Information. Except as expressly provided herein,
the parties agree that, for the Term and five (5) years
thereafter, the receiving party shall keep completely
confidential and shall not publish or otherwise disclose to
another party and shall not use for any purpose other than to
perform the purposes contemplated by this Agreement any
Confidential Information furnished to it by the disclosing
party hereto pursuant to this Agreement, except to the extent
that it can be established by the receiving party by competent
proof that such Confidential Information:
(i) was already known to the receiving party, other than
under an obligation of confidentiality, at the time
of disclosure;
(ii) was generally available to the public or otherwise
part of the public domain at the time of its
disclosure to the receiving party;
(iii) became generally available to the public or otherwise
part of the public domain after its disclosure and
other than through any act or omission of the
receiving party in breach of this Agreement;
(iv) was lawfully disclosed to the receiving party by a
person other than a party hereto, or
(v) was independently developed by the receiving party.
7.2. Permitted Use and Disclosures. Each party hereto may use or
disclose Confidential Information disclosed to it by the other
party to the extent such use or disclosure is reasonably
necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable
law, governmental regulation or court order, submitting
information to tax or other governmental authorities, making a
permitted sublicense or otherwise exercising its rights
8
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hereunder, provided that if a party is required to make any
such disclosure of another party's Confidential Information,
it will give reasonable advance notice to the latter party of
such disclosure and, save to the extent inappropriate in the
case of patent applications, will use reasonable efforts to
secure confidential treatment of such information prior to its
disclosure (whether through protective orders or otherwise).
7.3. Confidential Terms. Except as expressly provided herein, each
party agrees not to disclose any terms of this Agreement to
another party other than OSI without the consent of the other
party; provided, however, each party reserves the right to
make reasonable disclosures as required by securities or other
applicable laws, or to actual or prospective investors or
corporate partners, or to accountants, attorneys and other
professional advisors on a need-to-know basis under
circumstances that reasonably ensure the confidentiality
thereof, or to the extent required by law. If such
Confidential information is to become public information by
such disclosure the disclosing party must obtain the written
consent of the non-disclosing party in order to obtain
protection of the Confidential Information if necessary.
8. TERM AND TERMINATION
8.1.1. Unless terminated earlier, this Agreement and Sublicensee's
obligations to make payments to ABSC pursuant to Section 3.1.
is effective as of the Effective Date and shall continue in
full force and effect on a country by country basis until the
last expiration date of all patents encompassed within the
Method of Modulation Patents. ("Term").
8.1.2. Either party shall have the right to terminate this Agreement
at any time for a material breach of this Agreement by the
other party, provided that the nonbreaching party shall have
first given ninety (90) days prior written notice to the
breaching party describing such breach and stating the
nonbreaching party's intention to terminate this Agreement if
such breach remains uncured, and the breaching party
thereafter fails to cure such breach within such (90) days.
8.1.3. Sublicensee may terminate this Agreement by giving ABSC six
months' prior written notice of termination.
8.1.4. Termination of this Agreement shall not terminate either
party's obligations under Section 7, Sublicensee's obligations
to pay fees and royalties that have accrued under Section 3
prior to such termination or Sublicensee's obligations under
Section 9.3.
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9. MISCELLANEOUS
9.1. Binding Effect: Assignment. This Agreement shall be binding
upon the parties' respective successors and permitted assigns.
Neither party may assign this Agreement or any of its rights
or obligations hereunder without the prior written consent of
the other party (not to be unreasonably withheld) except that
either party may assign this Agreement as part of a merger or
consolidation in which the surviving entity assumes all of the
party's rights and obligations hereunder or a sale of
substantially all of the assets of such party to which this
Agreement relates.
9.2. Effect of Waiver. No waiver of any default, condition,
provisions or breach of this Agreement shall be deemed to
imply or constitute a waiver of any other default, condition,
provision or breach of this Agreement.
9.3. Indemnification. Each of ABSC and Sublicensee shall indemnify
and hold the other harmless with respect to any injury, loss
or cost resulting from the breach of any representation or
warranty provided pursuant to Section 6. Further, Sublicensee
shall indemnify and hold ABSC and OSI harmless with respect to
any injury, loss or cost resulting from the clinical testing
of compounds, the manufacture, use or sale of Products by
Sublicensee and its Affiliates and subsublicensees, and any
other activity carried out pursuant to the rights licensed
herein.
9.4. Force Majeure. Neither party shall lose any rights hereunder
or be liable to the other party for damages or losses (except
for payment obligations) on account of failure of performance
by the defaulting party if the failure is occasioned by war,
strike, fire, acts of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure
of suppliers, or any other reason where failure to perform is
beyond the reasonable control and not caused by the negligence
or intentional conduct or misconduct of the nonperforming
party, and such party has exerted all reasonable efforts to
avoid or remedy such force majeure; provided, however, that in
no event shall a party be required to settle any labor dispute
or disturbance.
9.5. Amendment. No modification, supplement to or waiver of this
Agreement or any Addendum hereto or any of their provisions
shall be binding upon a party hereto unless (i) made in
writing, (ii) duly signed by an authorized representative of
both ABSC and Sublicensee, and (iii) consented to by OSI, such
consent not to be unreasonably withheld.
9.6. Entire Agreement. This Agreement, including the Exhibits
attached hereto, sets forth the entire understanding and
agreement of the parties as to the subject matter hereof, and
there are no other understandings, representations or
promises, written or verbal, not set forth herein or on which
either party has relied.
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9.7. Notices. All notices under this Agreement shall be given in
writing and shall be addressed to
the parties at the following addresses:
For Sublicensee:
For OSI: OSI Pharmaceuticals, Inc.
106 Charles Lindbergh Blvd.
Uniondale, New York 11553
Attn: President
For ABSC: Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, California 92121
Attn: President
Copies of all notices sent by ABSC or Sublicensee shall be
sent to OSI.
Notices shall be in writing and shall be deemed delivered when
received, if delivered by a courier, or on the second business
day following mailing, if sent by first-class certified or
registered mail, postage prepaid, and return receipt
requested.
9.8. Arbitration. The parties recognize that disputes as to certain
matters may from time to time arise during the term of this
Agreement which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to
establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual
cooperation without resort to arbitration. The parties agree
that prior to any arbitration concerning this Agreement,
ABSC's CEO and Sublicensee's CEO will meet in person or by
video-conferencing in a good faith effort to resolve any
disputes concerning this Agreement, such meeting to be held
within 30 days after notice is received by one party from the
other requesting such a meeting. Except as otherwise provided
specifically herein, any controversy or claim under this
Agreement except a claim as to the scope, validity or
enforcement of a claim of an Assay Patent or a Method of
Modulation Patent shall be settled solely by arbitration by
one arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association (the "Association");
provided that the parties shall first have used their best
efforts to resolve such dispute by negotiation as set forth
above. The arbitration shall be conducted in ** The arbitrator
shall be selected by the joint agreement of the parties, but
if they do not so agree within twenty (20) days of the date of
a request for arbitration, the selection shall be made
pursuant to the rules of the Association. The decision reached
by the arbitrator shall be conclusive and binding upon the
parties hereto and may be filed with the clerk of any court of
__________
** This portion has been redacted pursuant to a request for confidential
treatment.
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competent jurisdiction, and a judgment confirming such
decision may, if desired by any party to the arbitration, be
entered in such court. Each of the parties shall pay its own
expenses of arbitration and the expenses of the arbitrator(s)
shall be equally shared; provided, however, that if in the
opinion of the arbitrator(s) any claim hereunder or any
defense or objection thereto was unreasonable, the
arbitrator(s) may assess, as part of the award, all or any
part of the arbitration expenses (including reasonable
attorneys' fees) against the party raising such unreasonable
claim, defense or objection. Nothing herein set forth shall
prevent the parties from settling any dispute by mutual
agreement at any time.
9.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York, applicable to agreements made in New York without
regard, or giving effect, to its principles of conflict of
laws.
9.10. Severability. This Agreement is intended to be severable. If
any provision(s) of this Agreement are or become invalid, are
ruled illegal by a court of competent jurisdiction or are
deemed unenforceable under the current applicable law from
time to time in effect during the term hereof, it is the
intention of the parties that the remainder of the Agreement
shall not be affected thereby and shall continue to be
construed to the maximum extent permitted by law at such time.
It is further the intention of the parties that in lieu of
each such provision which is invalid, illegal, or
unenforceable, there shall be substituted or added as part of
this Agreement by such court of competent jurisdiction a
provision which shall be as similar as possible in terms of
the economic and business objectives intended by the parties,
to such invalid, illegal or unenforceable provision, but shall
be valid, legal and enforceable.
9.11. Independent Contractors. The parties hereto are acting as
independent contractors and shall not be considered partners,
joint venturers or agents of the other. Neither party shall
have the right to act on behalf of, or to bind, the other.
9.12. Headings. Captions and paragraph headings are for convenience
only and shall not form an interpretative part of this
Agreement. This Agreement shall not be strictly construed
against either party hereto and maybe executed in two or more
counterparts, each of which will be deemed an original.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
By: Date:
--------------------------------- -----------------------
Name:
Title:
For Sublicensee
By: Date:
--------------------------------- -----------------------
Timothy J. Rink M.D., Sc.D.
President, CEO and Chairman
For Aurora Biosciences Corporation
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